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Walton Company operates three segments. Income statements for the segments imply that profitability could be improved if Segment A were eliminated. WALTON COMPANY Income Statements
Walton Company operates three segments. Income statements for the segments imply that profitability could be improved if Segment A were eliminated. WALTON COMPANY Income Statements for Year 2 Segment Sales Cost of goods sold Sales commissions Contribution margin General fixed operating expenses (allocation of president's salary) Advertising expense (specific to individual divisions) Net income (loss) A B $ 164,000 $ 237,000 (121,000) (73,000) (21,000) (30,000) 22,000 134,000 (35,000) (44,000) (5,000) (18,000) $ (18,000) $ 72,000 $ 258,000 (92,000) (29,000) 137,000 (34,000) $103,000 Required a. Prepare a schedule of relevant sales and costs for Segment A. b. Prepare comparative income statements for the company as a whole under two alternatives: (1) the retention of Segment A and (2) the elimination of Segment A. Complete this question by entering your answers in the bs below. Required A Required B Prepare a schedule of relevant sales and costs for Segment A. Relevant Rev. and Cost items for Segment A Effect on income $ 0
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